Automatic fiscal policy
A)is triggered by the state of the economy.
B)involves only a change in government outlays and no change in revenues.
C)involves only a change in personal income tax rates.
D)requires action by Parliament.
E)occurs during recessions but not during expansions.

Question

Quizplus · Accepted Answer

Automatic fiscal policy is triggered by the state of the economy, meaning that it does not require action by Parliament, the government, or any other entity. It involves automatic changes in government spending or taxation that are designed to stabilize the economy during times of recession or inflation. Automatic fiscal policy could involve an increase in government spending, a decrease in taxes, or both, depending on the circumstances of the economy.

Automatic Fiscal Policy